Sales Tax Rules
Kentucky imposes a state sales tax rate of 6%, with a maximum combined rate (state plus local) of 6% when local taxes are added. Economic nexus is triggered at $100,000 in sales or 200 transactions — meaning out-of-state businesses that exceed this threshold must collect and remit Kentucky sales tax. SaaS and digital software products are taxable in Kentucky. Groceries are exempt from state sales tax.
SaaS Tax Details
Prewritten computer software access services are taxable.
Grocery Details
Food for human consumption is exempt.
What is the sales tax rate in Kentucky?
Kentucky's state sales tax rate is 6%. When local taxes are added, the maximum combined rate can reach 6%. The actual rate you pay depends on the county and city where the purchase is made.
What is the economic nexus threshold in Kentucky?
Kentucky requires out-of-state businesses to collect sales tax once they exceed $100,000 in sales or 200 transactions in a calendar year. Once nexus is established, the business must register, collect, and remit Kentucky sales tax.
Is SaaS taxable in Kentucky?
Yes. Kentucky considers SaaS (Software as a Service) taxable. Businesses selling SaaS products to Kentucky customers must collect sales tax. Prewritten computer software access services are taxable.
Are groceries taxed in Kentucky?
Groceries are generally exempt from sales tax in Kentucky. Food for human consumption is exempt.
Are digital goods taxable in Kentucky?
Yes. Kentucky taxes digital goods including downloaded software, music, movies, and e-books. Businesses selling digital products to Kentucky customers should collect sales tax.
Are clothing items exempt from sales tax in Kentucky?
Clothing is subject to sales tax in Kentucky at the standard state rate.
How often do I need to file sales tax in Kentucky?
Kentucky requires sales tax filing on a Monthly or Quarterly. Online filing is available through the official Department of Revenue portal.
Automate Kentucky Sales Tax Compliance — Partner Services
Managing sales tax across multiple states is complex. These tools automate registration, calculation, filing, and remittance so you stay compliant without the headache.
Sponsored. DataTactic may earn a referral fee from these partners. This does not affect our data or editorial content.
Official Source
Kentucky Department of Revenue
Last verified: 2026-03-26 · Always confirm current rates with your tax advisor before filing.